New York governor Andrew M. Cuomo has announced a $30 million social impact bond initiative to support social service programs in the state.

The goal of the initiative, which is part of the state's efforts to transform how it does business, is to attract private investment for innovative child welfare and early development, health care, and public safety programs. Under the terms of the initiative, investors are responsible for managing the program they've invested in and meeting agreed-upon performance targets. If the program meets its targets, the state will repay investors for program costs and provide a return on investment based on the program's effectiveness. If targets are not met, the state is not obligated to repay the investors.

The state's Division of the Budget will consider applications to the program from nonprofit intermediary organizations, which are responsible for raising the funds needed to run the program and providing services. A single organization can apply to fill both roles, or two or more can partner on an application; applications are due at the end of September. While New York and Massachusetts are the only states with pay-for-success initiatives in place, New York's is the first to address so many critical policy areas.

"New York's Pay for Success initiative is one of the most ambitious social impact bond programs in the country," said Cuomo. "Pay for Success is a win-win for taxpayers because we will be funding programs based on their efficiency and ability to deliver results. By partnering with the private sector, this model will transform how our state provides its social service programs to better serve New Yorkers in the areas of public safety, health care, and early childhood development and child welfare, and save taxpayers money in the long run."